In a conversation with Bloomberg News Editor-in-Chief John Micklethwait and Morgan Stanley CEO James Gorman, he started by describing what he would do if he were running for president.

"I'd have to defend the banks, which is not a particularly good strategy to get elected in this country today," the business magnate said. "But we desperately need a good group of banks that are willing to take risks and make money so they can finance our growth. ... The healthier the banks are, the healthier our economy will be."

Bloomberg, who was mayor of New York City from 2002 to 2013, earlier this year chose not to enter the race for the White House. On Tuesday, he said he chose not to make a bid because of the way the two-party system is structured in the US. Those two parties control the legislature and would not let a third party into the fray if they could help it, he said.

"The main reason I didn't run is if I ran, I would have been an incredible candidate, would have gotten a third of the electoral votes, nobody would have a majority, it would have gone to the House of Representatives, and they would have picked Donald Trump — and you just can't do that to this country," Bloomberg said to applause.

He then described why he thinks Trump appeals to a large swath of American voters.

Trump supporters are "petrified of their future," Bloomberg said, and concerned that their social security will not be enough to provide for them in retirement. They're losing jobs to technology, and their children are behaving differently than they're used to.

On why many Americans believe Trump's promises, or those of other politicians like Vermont Sen. Bernie Sanders, Bloomberg said:

"The average person with the education we're providing our kids today doesn't understand that we've stopped teaching civics, we've stopped teaching history, we no longer teach Western civilization. When they hear democratic socialism, which is what Bernie Sanders was promoting, [and think] 'Yeah, yeah, democratic, that sounds good. And socialism, yeah, it's like that social media stuff.'

"That's what they think. They've never read about socialism before or communism, or anything. They have no knowledge of it. That's unfortunately — the worse our schools get, the worse the results are going to be. And it's pretty obvious what's happening."

Bloomberg said a number of big issues are facing the country.

"The greatest conundrum facing the next administration, and all of us, is how you create jobs when technology is destroying jobs at an alarming rate," he said.

The only solution he can think of is for the government to create jobs, he said, adding that corporate America is not the answer because it is using technology "to do more with less."